Beef crisis deepens but there are signs of optimism

Through three years of the BSE crisis most beef farmers waited out the closed border. But now that we have parity with the U.S. dollar, the situation has become more desperate and people are quietly discussing a different future.

There’s no money in the industry, except in the retail sector, says Robert Dobson, a Renfrew County cow/calf operator and former president of the Ontario Cattlemen’s Association. Manufacturers usually hold on for two years, says Dobson. But most cow/calf operators, with more resilience, have hung on for six years. And the last three have been worse than the first three.

Gone are the days when cattlemen looked at production research, such as lowering feed costs as the answers to profit woes. Advice on getting bigger and spreading costs over more units rings hollow. There just isn’t any money in the industry for big or small operations. Rudy Vanderbyl shut down his Glengarry feedlot operation. The Mcquaid’s at Omemee have move all their beef animals to Alberta.

The horrible truth is that the industry has been going backwards since the 1980s. Cull cows that brought 60 to 80 cents per pound then, are now bringing 20 to 40 cents. The Red Meat program enabling farmers to improve the quality of their herds with government assistance is gone. Research in the state-of-the-art beef barn at Kemptville College was discontinued in the 1980s and the bull test centre was closed in the 1990s.

The only positive this spring is that for the first time in years real government money is flowing to cow-calf operators. That has helped cushion the blow.

Cattlemen with prime land are turning from beef to cash crops where the return is fairer. But beef cattle thrive on lower quality land, land unproductive for row crops. And that’s the only land some cattlemen have.

Our fat, insulated government bureaucracies have been part of the problem. The Canadian Food Inspection Agency (CFIA) was unable to get the U.S. to follow international rules and allow Canadian cattle to cross the border for two and a half years of the BSE crisis. Then the CFIA put restrictions on Canadian cattle slaughtered for export that put an additional expense on farmers and exporters. What’s more, the Canadian government is unable to stop U.S. country-of-origin labelling for beef. Adding to the burden, the provincial government created nutrient management restrictions on beef farmers at the height of all the troubles.

Alberta beef men took advantage of NAFTA and increased exports until we had about 50 per cent of the beef we produced going south into the U.S. As everyone knows, that market was built on a 70-cent Cdn dollar. NAFTA has soured, though the U.S. market has alleviated our surplus cattle problem.

Dobson thinks the beef industry will rebound in another year. He might be right. I know that in 40-years of studying the agricultural industry, I have seen the dairy industry in trouble, the hog industry in trouble and cash crops plummet and rebound. Through my lifetime I have seen prosperity return to industries and regions because of reasons I could never have fathomed.

We know that world demand for red meat is up and world demand for protein is up. And reserves are down. That situation arose last in 1974 and 1975, when beef set a new record, $1 per pound on the hoof. Bob Dobson might just have it right about prosperity around the corner.